Pensions, taxes top local government concerns

Pensions and taxes lead a list of priorities for local governments as the 2013 legislative session approaches, with other less critical issues waiting just off stage.

City and county governments are hoping the state's improved financial picture will give them some breathing room and quell a recent trend in Tallahassee to place limits on how local governments can raise revenue and how that money can be spent.

Squeezed in recent years by lower property values, a drop in home sales and an anti-tax mood in the Legislature, representatives of the state's 67 counties and more than 400 municipalities say they hope to protect their autonomy while beginning to again reap the benefits of an improving economy.

For many cities, increasingly expensive pensions, especially for police and firefighters, are gobbling up larger portions of cash strapped budgets.

County governments are looking for the state to pick up the tab for juvenile justice detention and Medicaid while providing counties with more flexibility in how they can spend collections from the communication services tax, which they say is one of the few major sources of discretionary revenue.

"All told, the three of those combined is about $700 million, so it's a pretty significant hit when you look at them, especially taken together," said Cragin Mosteller, spokeswoman for the Florida Association of Counties.

Both groups have been eying changes to the state's communication services tax. Originally established in 2000 as a way to consolidate taxes on a growing list of communication services, the tax generated about $1.5 billion in revenue last year, according to Department of Revenue estimates. Of that, cities and countries receive about half.

Local governments claimed that changes made earlier this year would have a negative impact on them, but state economists couldn't determine what the long term economic impact would be on local collections.

"It is a complicated issue, and we certainly recognize the need to update the law," Mosteller said. "But it is imperative that it be revenue-neutral. These are critical dollars for local governments."

While funding remains the biggest county concern, Mosteller said, the group is also tracking legislation on a range of issues from protecting local fertilizer ordinances to ensuring that counties have a seat at the table on anything dealing with water supply.

For cities, much of the flack is over pensions paid to police and firefighters. While many cities have adequately funded pensions, some municipalities have seen their ability to fund pension benefits erode as the economy went south and tax collections dipped.

Further, changes made in 1999 make it more difficult for cities to modify benefits to address pension shortfalls.

A September study by the LeRoy Collins Institute, a Tallahassee-based think tank housed at Florida State University, found pensions for police, firefighters and other special category employees grew at a much steeper rate than that of other government workers. In seven years, contributions for public safety employees grew from 28 to 41 percent.

"For cities, the biggest issue is pensions," said Scott Dudley, director of legislative affairs for the Florida League of Cities. "I guess you could call that our 'super priority,'" Dudley said.

The battle pits cities against unions, whose representatives have been urging lawmakers to avoid the temptation of putting in place statewide policies instead of letting local governments and their employees hammer out agreements that meet their specific needs.

"There are some bad ones, but we don't think the good ones like Tampa or Tallahassee should be punished because some city in southwest Florida or southeast Florida is having problems," said Matt Puckett, executive director of the Police Benevolent Association.

As chairman of the Senate Government Oversight and Accountability Committee, Sen. Jeremy Ring, D-Margate, has pledged to have a bill on local pensions up for discussion when it meets again later this month.

"This is going to be a surgical approach to a delicate and complex issue," Ring said during a committee meeting in December.

Cities are also urging lawmakers to make no changes to the communications services tax that would restrict the ability of local governments to collect and spend the revenue. They also want to protect the ability of local governments to enact business taxes to help fund local priorities.

Last modified: January 3, 2013
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